This invention relates to tools for optimizing profits, and more particularly, to tools for determining how best to optimize profits when manufacturing and selling products that are assembled from supply chains with limited parts availability.
Business planning tools are currently available to assist an organization in maximizing its profits. In a typical scenario, an organization might use a forecasting model to predict the quantity of a product that will be sold at some time in the future. By predicting demand in this way, the organization can order sufficient materials to produce the predicted quantity of product that will be sold.
Although simple demand forecasts of this type are useful, they do not take account of supply and demand factors in an integrated fashion. For example, conventional forecasts do not take into account demand elasticity and the different profit margins of different products that can be assembled from the same parts. As a result, traditional planning tools do not allow organizations to truly maximize profit.
There is therefore a need for improved business planning tools to help an organization maximize profits.